A smarter approach to demand flexibility can help businesses reach net zero
It's clear that demand flexibility is critical to an efficient net zero energy system, the investment now must go into developing consumer-based flexibility products with real appeal.
For decades now, the task of balancing our electricity network has been supported by large businesses. Through services like Short Term Operating Reserve (STOR) and peak avoidance, businesses have contributed to resolving any mismatch between demand and supply, supporting National Grid in avoiding potentially disruptive balancing events.
But as we transition to a low carbon energy system and balancing the system becomes increasingly complex, it’s time to rethink demand response. We are no longer dealing with a linear generator-to-consumer model built around dispatchable, fossil fuel-powered generation. Now our generators are ‘greener’, but they’re also more distributed, more intermittent and less dispatchable. And with a wave of electric vehicles and heat pumps set to connect to the system over the coming years, the shape, volume and variability of electricity demand will grow significantly, putting extra pressure on the system.
This means that system operators will become increasingly reliant on flexibility to ensure demand can match supply. In fact, The Carbon Trust1 recently suggested that in order to operate an efficient net zero energy system by 2050, 11GW of flexible demand will be needed from commercial users, 12GW from smart assets, and 48GW from electric vehicles.
It’s clear that demand flexibility is critical to an efficient net zero energy system, so why aren’t more businesses being helped and encouraged to participate? While the tools and mechanisms have been developing to meet those needs, the investment now must go into developing consumer-based flexibility products with real appeal.
A UNIQUE ROLE IN DECARBONISATION
In a net zero system, responsible consumption isn’t just about using less energy; it’s equally about when you use it. The more consumers can synchronise their energy usage with renewable generators, the easier it will be to support a system powered on renewables alone. If we could always time our electricity usage to coincide with periods when the sun is shining or the wind is blowing, there would be considerably less requirement to store and shift generated power, or to deploy fossil fuel generators to fill the gaps.
Whilst necessary to decarbonise, the roll-out of electric transport and heating will also put networks under increased stress at specific times. For instance, a cold evening where entire neighbourhoods switch on their heat-pumps and plug in their cars would cause existing networks to fail. Dynamic management of these assets (and others) would help to avoid network stress events, mitigating the need for the expensive and time-consuming infrastructure upgrades.
Put simply, smart consumption of electricity will both enable and support the transition to net zero.
THE EVOLVING VALUE PROPOSITION OF DEMAND FLEXIBILITY
Until now, DSR schemes have been largely focused on targeting red band periods: the 7% of the year when avoidable energy costs are the most concentrated. In today’s more sophisticated energy landscape, this approach is outdated, limiting participation from businesses unable to turn down during this time and failing to offer support to the system throughout the day. The value of red band avoidance will also be greatly diminished once the Targeted Charging Review (TCR) takes effect. Today, demand flexibility needs to be more continuous, subtle and agile; to enable greater participation and support the system’s flexibility needs for 100% of the year. We will need to focus on ‘optimisation’ rather than ‘turning down’, and to do so at scale.
For businesses prepared to participate in an agile energy system, there are financial advantages to be gained, from saving money to accessing new revenue streams. For instance, organisations opting for Bryt Energy’s optimisation solutions are able to offset 20% of their energy spend by allowing us to subtly tweak their consumption (within agreed limits) in line with system needs, without impacting their operations2.
MEASURING SUSTAINABILITY SUCCESS
Whereas the financial incentives of optimisation are increasingly clear, the carbon incentive for businesses remains less so. Unlike installing a solar PV system or switching to an electric vehicle, where carbon savings can be easily measured and reported on, there is currently no mechanism for businesses to account for the benefits created through demand flexibility.
What we believe businesses need next is a means of articulating the success of their optimisation efforts. While it’s not possible to put a tangible metric on the tonnes of carbon saved through optimisation at an individual business level, we’d like to see incentives for participation and a recognition of their contribution to a cleaner energy system. That’s when we’ll see a real acceleration in adoption, as sustainability-focused businesses will be able to demonstrate how energy optimisation is supporting system decarbonisation.
DEMAND FLEXIBILITY SERVICES THAT ARE FIT FOR THE FUTURE
Given the clear system requirements and value proposition, the foundations to accelerate adoption of demand flexibility certainly exist. However, to truly make a difference, flexibility needs to be accessible to businesses of all sizes and types. It must be simple to understand, place no additional time or resource strain on the business, and create no operational disruption. It should also be able to provide all of the commercial, environmental and reputational benefits that come with making a commitment to net zero.
So, we’re developing a range of optimisation solutions to help businesses use electricity more intelligently and sustainably, and to support the energy system in achieving net zero. Combining our expertise in renewables and market access with industry leading technology providers, our solutions seamlessly integrate with customer assets and buildings to optimise their electricity usage and unlock the value from their operations. This approach helps to secure an efficient, affordable and reliable renewable future for us all.
Over the coming weeks, we’ll be releasing some exciting announcements about our partnerships with leading technology providers, and the ongoing development of our business optimisation solutions. So be sure to follow us on social media to hear about the latest news!
If you’re interested in how our optimisation solutions can support your business on the next step of its sustainability journey, get in touch with our team of experts at firstname.lastname@example.org or on 0121 726 7575.
Chris Curry, Head of Flexibility at Bryt Energy
2. Bryt Energy and partner's analysis